Author Archives: Felix

Is Your Bank Your Mortgage Lender?

Posted on July 17, 2008 by Felix

Anthony Bianco on Ken Lewis: As lending volume exploded, the issue of whether B of A should jump back into the subprime game sparked fierce internal debate. Customers by the millions were going elsewhere for mortgages and taking their banking … Continue reading →

Posted in banking, housing | Comments Off on Is Your Bank Your Mortgage Lender?

Oil Company Economics

Posted on July 17, 2008 by Felix

What would constitute price manipulation in the oil industry? Howell Raines doesn’t blame speculators for high prices in his latest column; instead, he blames the oil companies themselves. Supply and demand? Sure, but as John Lee, a business journalist at … Continue reading →

Posted in commodities, economics | Comments Off on Oil Company Economics

Angelo Mozilo’s VIPs

Posted on July 17, 2008 by Felix

Dan Golden’s full 5,500-word cover story on the VIP loans given by Countrywide to "Friends of Angelo" is now online. He leads with the most damning of the cases: that of Richard Aldrich, a California state appeals court judge. Aldrich … Continue reading →

Posted in housing, Politics | 1 Comment

To Walk Away or Not?

Posted on July 17, 2008 by Felix

I got an email this morning from a reader who will, for obvious reasons, remain anonymous: Let me give you a brief history and see if you have some advice from me. I am a physician who bought an investment … Continue reading →

Posted in housing | Comments Off on To Walk Away or Not?

European Storms

Posted on July 17, 2008 by Felix

Chart of the day comes from the FT, which has updated its April financial weather map of Europe. Over the past three months, just about every country in the region has deteriorated: you can see why the oceans have been … Continue reading →

Posted in charts, economics | Comments Off on European Storms

Status Update

Posted on July 16, 2008 by Felix

I’ve gone and caught some kind of nasty stomach bug, but fingers crossed it’s getting slowly better now. Blogging will be infrequent today, and then nonexistent from Friday, when I take a break in the south of France; back in … Continue reading →

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Extra Credit, Tuesday Edition

Posted on July 15, 2008 by Felix

Executive Suite: Joe Nocera is blogging. Morals, hazards: "The problem might not be panic selling, but rather an appropriate assessment of market risk. On the other hand, the problem might be panic selling." Pollyannas of the World Unite! It Is … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Tuesday Edition

The SEC Panics

Posted on July 15, 2008 by Felix

I think it was about the time that the SEC started trying to curtail short selling that I finally decided that we’re in panic mode. The market’s actually flat, as I write this, although Fannie and Freddie are down 20%, … Continue reading →

Posted in banking, regulation, stocks | Comments Off on The SEC Panics

The Real Cost of the Agency Guarantee

Posted on July 15, 2008 by Felix

Dan Gross says that if and when the federal government bails out Fannie and Freddie, "the bailout will be a bargain for American taxpayers, because any cost of it will be overwhelmingly offset by the tangible and quantifiable economic benefits … Continue reading →

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Going Private, Lehman Edition

Posted on July 15, 2008 by Felix

Lehman Brothers is now trading at $12 a share, which is less than its asset-management business alone is worth. So at this point it makes perfect sense for CEO Dick Fuld to go private, sell off Neuberger Berman, and basically … Continue reading →

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Why Hotel Wifi is Broken

Posted on July 15, 2008 by Felix

I’m never going to stay at the Hotel Felix again. Why? Lots of little things, which I shan’t bore you with. But one of them is their idiotic system of charging for wifi – the subject of Joe Brancatelli’s column … Continue reading →

Posted in travel | 1 Comment

Central Banker Salary Datapoint of the Day

Posted on July 15, 2008 by Felix

Last year, the Bank of England paid about £520,000 to Mervyn King: a salary of £290,653 and pension contributions of about £230,000. This year, King isn’t eligible for pension contributions, since he’s 60 years old now and that’s the age … Continue reading →

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The Upside of Falling Bank Stocks

Posted on July 15, 2008 by Felix

Financial stocks are plunging right now: if Fannie and Freddie can be brought to their knees, then no bank is safe. And falling bank stocks are systemically very worrying: the equity cushion is an important part of the way in … Continue reading →

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Paulson Bailout Has Very Limited Success

Posted on July 15, 2008 by Felix

The top headline on the front page of the FT this morning: US loans rescue passes its first test The top headline on the front page of FT.com this morning: US bail-out fails to calm nerves It’s not that things … Continue reading →

Posted in banking | Comments Off on Paulson Bailout Has Very Limited Success

Extra Credit, Monday Edition

Posted on July 14, 2008 by Felix

Fannie, Freddie, Ginnie now account for 130% of mortgage lending in U.S. "The numbers are even more dramatic if you just look at the most recent period for which data are available, the first three months of this year. Total … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Monday Edition

The Astonishing Growth of Bank Deposits

Posted on July 14, 2008 by Felix

Paul Kedrosky finds this chart of total US bank deposits in a WSJ story about FDIC insurance. But step back a minute: just look at how total deposits have grown over the past ten years! Since 2000, bank deposits have … Continue reading →

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The Intelligent Investor

Posted on July 14, 2008 by Felix

Jason Zweig has a new column at the WSJ, called "The Intelligent Investor": Could things possibly get worse? I don’t know, but I am an optimist — so I certainly hope things do get worse. Nothing else should satisfy an … Continue reading →

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Plan B: Nationalization

Posted on July 14, 2008 by Felix

Amazingly, the Paulson statement seems to have worked! Stock indices are in not-down territory, the dollar is up, Fannie’s up 10% in early trade, and even Freddie’s up 27 cents. Even if the stocks are trading wholly on option value, … Continue reading →

Posted in housing, Politics | Comments Off on Plan B: Nationalization

Parsing Paulson: The Fannie and Freddie Bailout

Posted on July 13, 2008 by Felix

Hank Paulson is a tough guy. He’s no pushover: just look at that phone call to Jamie Dimon, telling him that anything over $2 a share was altogether far too much money to pay for Bear Stearns. So what are … Continue reading →

Posted in housing, Politics | Comments Off on Parsing Paulson: The Fannie and Freddie Bailout

Ben Stein Watch: July 13, 2008

Posted on July 13, 2008 by Felix

I’ve spent an absolutely wonderful weekend celebrating my sister’s wedding, so I have no appetite whatsoever for addressing at any length Ben Stein writing on "the economics of love". Trust me, the column is just as as unpleasant as it … Continue reading →

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RSS update

Posted on July 12, 2008 by Felix

Lots of problems with the felixsalmon.com RSS feeds right now. To be sure of getting all of my Market Movers posts, Portfolio’s RSS feed for them is http://feeds.portfolio.com/portfolio/marketmovers?format=xml. It doesn’t include any felixsalmon.com content, but given the frequency of posting … Continue reading →

Posted in Announcements, Econoblog, Not economics | Comments Off on RSS update

How Bear Markets Help M&A Dealmaking

Posted on July 11, 2008 by Felix

The FT reports on how the Dow-Rohm deal got done so easily: Dow’s $78 per share bid represented a premium of 46 to 47 per cent to Rohm and Haas’ share price when the parties first started to negotiate, but … Continue reading →

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The Future of News: Collaboration

Posted on July 11, 2008 by Felix

Yesterday, Dealbreaker’s John Carney told me that for the past couple of months his daily Wall Street Journal has been delivered with a free copy of the New York Sun. That kind of bundling makes a lot of sense for … Continue reading →

Posted in Media | Comments Off on The Future of News: Collaboration

Extra Credit, Thursday Edition

Posted on July 10, 2008 by Felix

Guru Returns Show Just How Tough the Going Has Been Lately Yahoo must call time on Jerry Yang: "Microsoft makes software, Google does search, Facebook is a social network. Yahoo is purple and has an exclamation mark. When asked at a Journal … Continue reading →

Posted in remainders | Comments Off on Extra Credit, Thursday Edition

Why Force Your CEO to be Chairman?

Posted on July 10, 2008 by Felix

Gary Wilson finds an interesting bylaw in some of America’s bluest blue-chip companies: Such companies as General Electric, Coca-Cola, Exxon Mobil, UPS, Deere, Caterpillar, CSX and Johnson & Johnson actually have bylaws that require the CEO to also serve as … Continue reading →

Posted in governance | Comments Off on Why Force Your CEO to be Chairman?